The world has been hit terribly by the Global economic recession. The hit has been particularly hard for cell phone manufacturers that include big names like Nokia, Sony Ericsson and Motorolla.

I am particularly concerned about Nokia – the fact that its sales have plummetted by 90% is alarming indeed.

Here, I have tried to bring to your attention these losses and what impact they may have on the telecom industry using news from various sources of quarterly reports coming from manufacturers.

I’ll begin with Nokia, followed by Sony Ericsson and Motorola.

Nokia

Nokia’s net profit falls 90 percent

If you were wondering how bad things have gotten for the mobile handset market, just take a look at Nokia, the world’s largest maker of cell phones.

The company on Thursday reported a 90 percent fall in first-quarter net profits as the global recession took a big bite out of demand for mobile devices.

For the first quarter, which ended March 31, Nokia said that net profits fell to 122 million euros ($161.3 million). A year earlier the company reported net profits of 1.22 billion euros. Analysts had expected the company to report net profits of about 306 million euros.

The company’s sales fell to 9.27 billion euros from 12.66 billion euros last year. This was also below analyst expectations, which were counting on sales of around 9.80 billion euros.

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Sony Ericsson

Sony Ericsson posts loss, plans to cut 2,000 jobs

STOCKHOLM – Mobile phone maker Sony Ericsson on Friday posted a euro293 million ($387 million) net loss in the first quarter on falling sales and said it would slash an additional 2,000 jobs to cut costs.

The result was the third consecutive quarterly loss for the Sony Corp. and LM Ericsson AB joint venture, which reported a profit of euro133 million in the same period in 2008.

Sales in the January-March quarter tumbled by 36 percent to euro1.7 billion, from euro2.7 billion a year earlier.

Sony Ericsson attributed the sales drop to weaker demand for mobile phones, with distributors and retailers trimming inventories amid the economic slowdown.

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Motorola

Motorola posts $3.6b loss as devices sales fall by 26 percent

Motorola reported a fourth quarter loss of $3.6 billion, or $1.57 a share, hit by falling sales, particularly in its mobile handset unit. Sales dropped 26 percent, sinking to $7.1 billion, and missing analyst expectations of $7.2 billion. Mobile Devices saw sales drop to $2.35 billion, a 51 percent decline compared to the same period last year. The operating loss was $595 million, compared to an operating loss of $388 million in the year-ago quarter. The struggling handset maker shipped 19.2 million handsets in the quarter, which it estimated gave it a 6.5 percent of the global market. It blamed the unit’s poor performance on the weakening economy and on “gaps in its portfolio.” Motorola also said it was suspending its dividend, and was embarking on a cost savings plan that aimed to save $1.5 billion in 2009. In another blow, Paul Liska, its chief financial officer, is leaving the company. SVP and corporate controller Edward J. Fitzpatrick has been named acting CFO until Motorola can find a replacement.

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Other market players like Apple (net loss o f $69 million) and Palm (net loss of $841,000 approx.) have also reported losses over the first quarter.

Blackberry, however, seems to be gaining some ground with its demand rising, particularly in the Middle East and in South-Asian countries like Pakistan.

The mobile handset manufacturing industry does seem to be going through a really rough patch for now. Given the circumstances, there is not much hope for the immediate future but things might stabilize over the course of a couple of years, I hope.

Something that should is worrying for me as a Telecom professional is that this sharp drop in demand of handheld devices and cell phones will have a direct impact on service operators, but let us all hope for the best.

The market in Pakistan is promising indeed. There still is quite a lot of potential for growth here. Let us all hope for the best!